How to regain confidence after deleting your account
It’s not unusual for beginner Forex traders to wind up completely wiping out an account through a series of losses or poor risk management. While this unfortunate scenario can be avoided with the right amount of trading knowledge and discipline, it would also help to have a battle plan to bounce back from blowing up your account.
Instead of dwelling on frustration and anger, you should take a more constructive approach in dealing with blowing up your forex account. Perhaps the first step you can take is acceptance, as this will put you in a better position to start recovering from the loss. There is no need to focus on the negative aspect though, take it as a lesson learned and an opportunity to bounce back.
Acceptance of a loss and conclusions drawn from it
After accepting the reality of losing your money, look back and try to figure out where you went wrong. Did you risk too much on each trade? Did you overtrade in an effort to recover money lost on a bad trade idea? Were you over-leveraged? Did you fail to conduct proper analysis before taking trades? These are just some of the questions you can think about when analyzing your decisions.
And that journal again
At this point, you should have a trade journal that you can review in order to pinpoint the mistakes you’ve made and how you can avoid them in the future. Without a proper trade journal, it might be difficult for you to recall your trades and figure out what you can improve.
Individual strategy for each trader
Another factor that you can review is whether or not your trading system is working for you. Even if you have the proper discipline and risk management rules, if your trading system isn’t appropriate for the market environment, then you could still wind up with a terrible trading performance. You can opt to run another set of back tests on your mechanical system or take some time to review the rules of your trading system to see if any adjustments need to be made.
A demo account to help you get back to earning money
The next step after figuring out where you went wrong is to go back to demo trading. This can allow you to forward test the adjustments you are planning to make in order to have a more profitable performance and avoid wiping out your entire forex account again. Apart from that, this can be a helpful exercise in regaining your confidence in trading.
If you do not want to go back to the demo account at all costs, and you are one of the people who say that when you learn it only on a real real account, then an alternative may be a cent account, which does not require a large deposit and at the same time does not cause large losses because each a trade is usually 1/100 of the value of the same standard position size.
Sure, there are a lot of psychological differences to demo trading and Live Account trading as discussed in the previous sections of Trading Psychology, but that should be enough for you to relax and re-learn the rules and conditions of technical analysis. The important thing to remember is to take the time to regenerate your mind, and don’t rush into proving to yourself that you can trade better now. The market will not run away, you will still be able to trade in a week, month or year.
Once you have your trading confidence back and are able to see consistent results on demo, you can open a live trading account again and stick to the lessons you’ve learned.